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Capitulation

We’ve had a nice run, of late, as SPX, CL, VIX and USDJPY have all tagged targets where expected. As meltdowns go, this one has been very well behaved. Even the bounce we anticipated on Friday played out as expected, with the capitulation waiting until the final hour or so or trading.

if SPX can remain below the SMA5 20, there’s a clear shot to 2415 at the bottom of the red channel. Otherwise, we’ll get jerked around for the rest of the day with the promise/threat of a drop hanging over our heads for hours and hours.

Today should see the rest of that particular leg complete, though the target has moved just a bit. And, as we noted on Aug 10 when we first laid out these targets, there is considerably more downside if this low doesn’t hold.